Politicians Ruin Cities Through Taxes, Takeovers

Wednesday, 17 Mar 2010 07:52 AM

By John Stossel

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I like my hometown, but I must admit that New York has problems: high taxes, noise, traffic. Forbes magazine just ranked my city the 16th most miserable in America. Ouch!

Of course, that makes me wonder: What's America's most miserable city?

Cleveland, says Forbes. People call it "the Mistake by the Lake. " Cleveland, once America's sixth-largest city, has been going downhill for decades.

Why do some cities thrive while others decay?

One reason is that some politicians smother their cities with the unintended consequences of their grand visions, while others have the good sense to limit government power.

In a state that already taxes its citizens heavily, Cleveland's politicians drown businesses in taxes.

One result: Since 2000, 50,000 people have left the city. Half of Cleveland's population has left since 1950.

But the politicians haven't learned. They still think government is the key to revitalization. While Indianapolis privatized services, Cleveland prefers state capitalism.

It owns and operates a big grocery store, the West Side Market. Typical of government, it's open only four days a week, and two of those days it closes at 4 p.m. The city doesn't maintain the market very well.

Despite those cost savings, the city manages to lose money running the market. It also loses money running golf courses — $400,000 last year.

Another way that cities like Cleveland cause their own decline is through regulations that make building anything a long drawn-out affair.

Cleveland has 22 different zoning designations and 673 pages of zoning guidelines.

By contrast, Houston has almost no zoning. This permits a mix of uses and styles that gives the city vitality. And the paperwork in Houston is so light that a business can get going in a single afternoon.

In Cleveland, one politician bragged that he helped a business get though the red tape in "just 18 months."

Randall O'Toole, author of "The Best-Laid Plans: How Government Planning Harms Your Quality of Life, Your Pocketbook, and Your Future," says Houston does have rules, but they are more flexible and responsive to citizens' needs because they are set by neighborhood associations based on protective covenants written by developers.

Politicians' rules rarely change because the politicians don't have their own money on the line. Cleveland's managers thought that funding gleaming new sports stadiums (which subsidize wealthy team owners) and other prestigious attractions like the Rock and Roll Hall of Fame would revitalize their city.

Urban policy expert Joel Kotkin says, "This whole tendency to put what are scarce public funds into conventions centers and . . . ephemeral projects is delusional." But politicians claim that stadiums increase the number of jobs.

Not so, says J.C. Bradbury, author of "The Baseball Economist: The Real Game Exposed." "There's a huge consensus among economists that there is no economic development benefit to having these stadiums," he says.

The stadiums do create jobs for construction workers and some vendors. But "it's a case of the seen and the unseen," Bradbury says, alluding to the 19th-century French economist Frederic Bastiat. "It's very easy to see a new stadium going up . . . But what you don't see is that something else didn't get built across town . . . It's just transferring from one place to the other.

"People don't bury their entertainment dollars in a coffee can in their backyard and then dig it up when a baseball team comes to town. They switch it from something else," Bradbury adds.

Stadiums are among the more foolish of politicians' boondoggles. There are only 81 home baseball games a year and 41 basketball games. How does that sustain a neighborhood economy?

But the arrogance of city planners knows no end. Now Cleveland is spending taxpayers' money on a medical convention center that they say will turn Cleveland into a "Disney World" for doctors.

Well, Chicago's $1 billion expansion of the country's biggest convention center — McCormick Place — was unable to prevent an annual drop in conventions, and analysts say America already has 40 percent more convention space than it needs.

Politicians would be better stewards of their cities if they set simple rules and then just got out of the way.

I won't hold my breath.

John Stossel is host of "Stossel" on the Fox Business Network. He's the author of "Give Me a Break" and of "Myth, Lies, and Downright Stupidity." To find out more about John Stossel, visit his site at www.johnstossel.com.

© Creators Syndicate Inc.

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